The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1887-07-01
WHEAT CORNERS.
HISTORY OF THE LAST AND MOST
DISASTROUS ONE.
How tho Bulls Had to Actually Buy Up
All the Wheat In Store In Order to
Make tho Corncr-Phiiosophy OF Corners
of All Kinds Explained.
[specIal Correspondence.l

va 1h ssAP'"shou'
Especial Correspondence
CHICAGO June 2s.--A few days ago cy-
clone struck the wheat corner Of 1887, and a
few hours later nought was left but mass OF
| ruins and horde of wild and shlieling vic
| Tins Chicago has become accustomed 10
| corners; they are nothing new here, and yet
the town has rarely been so stirred up as by
this speculative collapse. This was tho
biggest corner ever attempted in this market,
and, quite naturally, tho tumble was a terrific
one, once it had started. 1t was q most mys-
terious deal, too. Along in the last days OF
March the grain gamblers here first be.
gan to feel that some outside influence of
large resources and definite purpose WINS
at work in the market, bulling the price
of wheat. So far as could be discovered,
the clique's headquarters were at Cincinnati,
whence came all orders to tho brokers
in this city. The kilograms were simply
signed "W." No one outside of the offices
of four or five brokerage firms knew who
was furnishing the money for the operation.
There were many surmises, which have in
part turned out correct, but as a matter of
fact such caution and secrecy were maintained
by the clique that for more than two months
the identity of the principal manipulators of
the grain market was quite unknown. There
was, however, no doubt about the clique's
purpose, which was to obtain control of the
grain market by the sheer force of capital,
push up the price, and squeeze big profits out
of all who dared stand in their way There
was nothing in the state of trade, nor in the
condition of the new crop, to warrant such a
movement for higher prices; but these purse.
proud schemers, exaggerating their own
shrewdness and the power of their wealth,
plunged ahead regardless of the laws of
supply and demand and of the conditions
which make markets, and in this collapse of
their enterprise meet with retribution most
just and fitting.
1t was very large contract which the
clique took upon themselves The operation
Of cornering wheat is very simple one end
an easy thing to accomplish, proeiding you
have purse of sufficient length and breadth.
There is nothing legitimate about an enter
prise of this sort any more than there would
be about scheme TO buy up all the b,ead in
the village Of Smithville, with the Idea of
compelling the inhabitants to pay an extra
nickel loaf or 60 without bread for their
dinners; but in carrying out their operation
the conspirators found it necessary to do a
little business that is ordinarily considered of
legitimate kind. Upon beginning their
deal they found about s, 100000 of bushels of
wheat III the big elevators in this city This
they had to buy outright-not on margins,
but for cash-and for this leash wheat' they
paid rather more than eighty cents a bushe
Here was an investment of more than three
millions and a half Of dollars Possession of
the stock in store" comes high, but the cor
nerers had to have it. Nor was this all. As
the price of cash wheat gradually rose under
manipulation from eighty cents toward
ninety, country holders began to think it
about time to market. Elevator men shipped
what they had on hand, and the old farmers
who are always "holding for riseo emptied
their granaries. Wheat soon began pouring
into Chicago from all quarters, and rather
sooner than the clique had looked
for the huge elevators were full to their very
roofs All this wheat the conspirators were
compelled to buy; and in this manner
S3,5OO,OO were invested. Why did the
clique need to own the warehouse receipts
for all this grant Simply that by such
monopoly it night create a "corner" With
the clique holding all the wheat in town
nobody else could offer any for sale; and with
no offerings prices were bound to 90 up. It
must be remembered, however, that 81 ,OOO,-
900 were not needed to gain control of the
10000, 600 bushels Of wheat IN store. As fast
as one batch Of elevator receipts were pur-
chased the clique's agents sent them to the
banks as collateral and on them borrowed
money to the extent Of 60 or 65 cents bushel
and used the funds thus secured in buyu.r
more warehouse receipts. Thus the actual cash
outlay which the clique found it necessary to
n AXE for the wheat in store was about twenty
rents n bushel or more thnn $4,000 600 But
CHS was only the foundation stone for the
corner building, and the superstructure, as
we shall see, cost the designers several mil
lions more.
The scheme in running a corner is to buy
and hold the actual stuff in order to send the
prices up, and at the same time 20 around
making wagers with a lot of fellows that
prices will advance. That is Just what the
clique did. While it was investing three or
four millions in cash wheat il was also
placing bets Of three or four millions more ON
the market. That was TIE "optionp or "fu-
lures" part Of the operation-the grain
gambling on margins.
Well, for a long time the conspiracy ap-
peared to DO getting along in o swimming
way. Everybody had confidence in the
clique and its ability to raise all the funds
needed TO carry on its great deal. At the
end of May it had ralsed in a few hundred
thousands of profits ON options for that
month, and already during June q number
OF "shorts"-that is, spectators who had
wagered that wheat was not going higher
had concluded to cut short bad bargain and
settle up. In this way the clique raked in
some moro profits and was counting ON a
great inflow at the end of the month
But the clique was reckoning without its
host. For some reason, probably an outcrop.